The collaboration, first reported by the Financial Times, involves Broadcom developing custom AI chips to alleviate the processor shortages that have hindered the rollout of new ChatGPT models.

OpenAI CEO Sam Altman had previously flagged the GPU shortage in February as a key bottleneck delaying ChatGPT-4.5. Broadcom confirmed the agreement during its earnings call, disclosing a $10 billion one-time order from its new customer, which people familiar with the matter identified as OpenAI.

Also Read: Broadcom Shares Drop as Marvell’s Cautious Forecast and Analyst Downgrades Weigh on AI Chip Sector

The announcement propelled Broadcom shares up nearly 11% on Friday, the Wall Street Journal reported.

Broadcom CEO Hock Tan described the new orders as generating “immediate and pretty substantial demand,” revising the company’s fiscal 2026 AI revenue outlook upward from prior projections of 50%–60% growth, Bloomberg reported.

Analysts expect the chips will allow OpenAI to reduce dependence on Nvidia (NASDAQ:NVDA) while optimizing processors for its proprietary models. Bloomberg noted the two companies are also collaborating on an inference chip designed for post-training AI applications.

Price Action: AVGO stock is trading higher by 5.68% to $353.91 at last check Monday.

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